Rising oil prices push Exxon Mobil to U.S. record profits

Published 6:00 pm, Thursday, January 31, 2008

Exxon Mobil Corp. on Friday posted the largest annual profit by a U.S. company _ $40.6 billion _ as the world's biggest publicly traded oil company benefited from historic crude prices at year's end.

Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, beating its own mark of $10.71 billion in the fourth quarter of 2005.

The previous record for annual profit was $39.5 billion, which Exxon Mobil made in 2006.

The eye-popping results weren't a surprise given record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel, more than 50 percent higher than a year ago.

Crude prices reached an all-time trading high of $100.09 on Jan. 3 but have fallen about 10 percent since.

The record profit for the October-December period amounted to $2.13 a share versus $1.76 a share in 2006. Year-ago net income was $10.25 billion.

Also extraordinary was Exxon Mobil's revenue, which rose 30 percent in the fourth quarter to $116.6 billion from $90 billion a year ago.

For the year, sales rose to $404.5 billion _ the most ever for the Irving, Texas-based company _ from the $377.64 billion it posted in 2006.

In a statement, Exxon Mobil Chairman Rex Tillerson said the company continued to meet the world's energy needs through its "globally diverse resource base."

Its shares fell 65 cents to $85.75 in morning trading after rising as high as $87.86 earlier in the session.

Higher commodity prices in the quarter were clearly evident from earnings at Exxon Mobil's exploration and production arm, known as the upstream. Income rose 32 percent to $8.2 billion from $6.2 billion a year ago.

On an oil-equivalent basis, production increased nearly 1 percent from the fourth quarter of 2006. Excluding the expropriation of its Venezuelan assets last year, divestments and other factors, production rose nearly 3 percent.

Refining and marketing, or downstream, earnings were $2.3 billion, up from nearly 2 billion in the year-ago quarter, as improved refining operations offset lower U.S. refining margins.

In the U.S., downstream earnings were off sharply from a year ago _ $622 million in the most-recent quarter versus $945 million in 2006.

Refining margins _ the difference between the cost of crude and what the company makes on refined products such as gasoline _ have been squeezed in recent months as spiking oil prices outpaced increases in gasoline prices and other refined products.

Already, ConocoPhillips has said record oil prices at the end of 2007 helped it post a 37 percent increase in fourth-quarter profit, even as it produced less crude and natural gas than a year earlier. Its fourth-quarter net income rose to $4.37 billion versus $3.2 billion a year earlier.